New Fica exemption to ease low-value, cross-border transfers
JOHANNESBURG (miningweekly.com) – Following international best practise, Finance Minister Nhlanhla Nene has signed the proposed Financial Intelligence Centre Act (Fica) exemption for low-value cross-border money transfers, reducing anti-money-laundering controls and making it easier for migrant workers in South Africa to transfer money to their families in neighbouring States.
According to independent Johannesburg-based trust FinMark, the exemption, which comes into effect on July 1, would reduce the cost of transactions and reduce the amount of administrative work required on the part of financial institutions.
It was also expected to encourage remitters currently using informal and “risky” channels to transfer funds through formal, established banking transfer mechanisms.
“This is definitely a step in the right direction for the financial inclusion of poor people in the Southern African Development Community region,” said the trust.
A 2012 FinMark study had shown that about 68% of the value of remittances from South Africa were channelled through informal cross-border corridors.
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